EU-Russia Centre calendar

A new report titled ‘Brics and Beyond’ released by PricewaterhouseCoopers has shown that Russia is to become Europe’s leading economy by 2030, surpassing Germany, and pushing the UK out of the top 10 by 2050. However, Russia is still no China. The main difference between these two members of Brics is that Chinese politics caters to its economy, with the communist model being modified to accommodate a localised version of capitalism, while in Russia, the economy caters to politics: President Vladimir Putin’s politics.

Friends and lawyers have accused the Netherlands of complicity in the suicide of opposition activist Alexander Dolmatov in a Dutch extradition centre. Dolmatov was found dead in his cell early Thursday in an extradition centre in Rotterdam. He had fled to the Netherlands last summer to seek political asylum after being sought by police in connection with the violence during a 6 May protest against President Vladimir Putin’s inauguration. His lawyer Yevgeny Arkhipov accused Dutch authorities of grave rights violations.

Government ministers were offered a free crash course in WTO rules after one of the country’s most senior financiers savaged officials for failing to understand the organisation. Pascal Lamy, the head of the World Trade Organisation, said that the group would be willing to provide a course of study for Russian officials and experts who are not yet up to speed with the rules of the global trade body. Lamy’s offer came after a scathing assessment of Russian officialdom’s familiarity with the WTO by Sberbank chief German Gref the previous day. Gref said: “I know they haven’t spent a single hour on studying the rules and norms of the WTO. And if you now reply yes, you have, then I’ll ask you the first and most simple question because I’ve done this for seven years: What regulates the rules of the WTO? Don’t risk trying to answer that.”

The secretary general for the Organisation for Economic Cooperation and Development, Jose Angel Gurria, said at the Gaidar economic forum that accession to the OECD provides a good chance for Russia’s decision-makers to identify weaknesses in social and economic policy and respond with adequate reforms. He added that work on Russia’s accession to the OECD is in full swing, but the country is facing enormous challenges. Addressing those challenges should involve economic diversification, more attention to social and environmental issues and improvements in public administration. Medvedev has said Russia is very interested in joining the OECD as soon as possible, although the government understands that there are some “technical obstacles” on that way.

BP’s new alliance with Rosneft has threatened to undermine its position in Azerbaijan. BP holds a 20% stake in Rosneft, will take two seats on its board and is expected to appoint at least one Russian to its board. Executives at Socar, Azerbaijan’s state-run oil and gas group, raised strong concerns that the Rosneft deal would allow the Kremlin to exert indirect influence through the British company. An industry source in Baku said: “It’s not only energy security issues. It’s also a political and national security issue. Socar was very concerned.”

Vadim Nikitin says that President Vladimir Putin and the US Republicans are linked by the fact that they have successfully made their rivals look like elitists. As Thomas Frank detailed in ‘What’s the Matter with Kansas’ in 2004, the American right has successfully replaced the old class-based ideological divisions with new ones based on culture, perceived authenticity and lifestyle. That conservative economic policies uphold the interests of a small minority has become irrelevant – as long as their cultural positions remain as populist as possible. Similarly, Putin may have rejected American ideas of democracy but he seems to have wholeheartedly internalised ex-US President George W Bush’s approach to the culture war, branding his own opposition as elitist and unrepresentative of common people. The Kremlin is using these culture war tactics to drive a wedge between Russian heartland voters and the educated, upwardly mobile liberal opposition clustered around Moscow and St Petersburg.

The Russian government’s ambitious plans for privatisation are at risk of becoming an orphan policy because President Vladimir Putin believes in the virtue of state control, especially over strategic industries. And he remains uneasy about renewed economic crisis. Prime Minister Dmitry Medvedev’s shrinking role is also a factor. Politically, says one economist who advises the government, Medvedev “doesn’t exist any more,” so there is “no champion for privatisation.” It is becoming clear that the “cabinet does not have a real preference” when it comes to privatisation, says Natalia Orlova of Alfa Bank, which leaves individual company bosses with some latitude. The real question is not what is privatised, but how. The state may consider the exchange of energy holdings between Rosneft and Gazprom to be privatisation; or it could count sales to state companies like Russian Technologies. But that does nothing to boost its attractions for foreign investors.